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Incentives and benefits

Employee benefits in Luxembourg: 13th salary, severance pay and compensations

In Luxembourg, during a job contract, employers must follow the law to provide several benefits for their workers. This includes things like paid vacation, extra pay for overtime work, time off for new moms and dads, and severance pay if the job ends, plus more.

Last time updated
03.10.24

Luxembourg is known as one of Europe's top places to live, offering a great quality of life and good working benefits for its employees. People working here usually have better conditions than in other countries. For example, the pension system is impressive – you only need to contribute for 10 years to be eligible for a pension.

Different types of workers' remuneration and bonuses in Luxembourg

Luxembourg offers diverse forms of remuneration, bonuses, and benefits for its workforce. While these entitlements are universal, each comes with distinct conditions. In the upcoming sections, we will intricately examine each benefit that Luxembourgish workers are entitled to, elucidating the specific conditions associated with each.

What if you work with yourself?

It's crucial to note that these provisions apply to employees working in Luxembourg and do not extend to independent workers.

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Luxembourg
Guide

Learn more about self-employment in Luxembourg

Overtime payment

In Luxembourg, the standard working hours are set at 8 hours per day and 40 hours per week. For any work beyond this agreed-upon standard, employees are entitled to compensation in the form of overtime pay.

However, there is a maximum limit of 2 hours per day and 8 hours per week for overtime.

Eligibility
Compensation

Annual paid leave

In Luxembourg, workers are entitled to annual paid leave lasting a minimum of 26 working days, with the possibility of additional days granted by employers or collective agreements. However, specific conditions govern this benefit, and we will examine them in detail.

Eligibility
Conditions

Weekend and holiday work compensation

All workers and apprentices in Luxembourg enjoy the right to legal public holidays. While the premise is straightforward, with 11 legal holidays, important nuances exist, such as working on holidays due to specific company conditions or holidays falling on weekends.

  1. New Year's Day (January 1)
  2. Easter Monday
  3. Labor Day (May 1)
  4. Europe Day
  5. Ascension Day
  6. Whit Monday
  7. National Day (public celebration of the Grand Duke's birthday on June 23)
  8. Assumption Day (August 15)
  9. All Saints' Day (November 1)
  10. Christmas Day (December 25)
  11. 2nd Christmas Day (December 26)
Eligibility
Compensation
Celebrations
Holiday
Luxembourg

Take a look at our holidays calendar for 2024

Sick leave

Luxembourgish workers are entitled to take days off from work in the event of incapacity due to illness or accidents. However, justifying their absence and meeting specific requirements are essential.

Eligibility
Notification obligations
Conditions for leaving home
Compensation during sick leave

Maternity leave

In Luxembourg, every pregnant woman working is entitled to maternity leave, comprising both prenatal and postnatal periods. This provision not only safeguards the health of expecting mothers but also allows them dedicated time to care for their newborns. Throughout pregnancy and maternity, female employees benefit from specific contractual guarantees and adjustments to their working conditions.

Support for mothers

Pregnant women has protection against dismissal from the onset of pregnancy, special health and safety protection in roles with specific risks, exemption from night work risks, leave for prenatal examinations, and several weeks of leave both before and after childbirth. Flexible schedules for breastfeeding are also part of the supportive measures.

Luxembourg
Work
Law
How to apply for maternity leave?
Read dedicated article

To obtain these benefits, certain conditions must be met.

Prior pregnancy notification

To benefit from the protection granted to pregnant women, a notification to the employer is required. This can be done at the woman's discretion but needs to be accompanied by a medical certificate confirming the pregnancy, sent by registered mail with acknowledgment of receipt, or delivered in person with the employer's signature.

Maternity leave application

For maternity leave entitlement, women must submit a medical certificate to both the Caisse Nationale de Santé (CNS) and their employer, indicating the expected delivery date during the last 12 weeks of pregnancy.
Prenatal and postnatal leaves
Benefits and protection
Compensation

Paternity leave

Paternity leave is a special allowance of 10 days granted to working fathers upon the birth of a child or the adoption of a child under 16. Below, we outline the conditions for accessing this leave.

Eligibility
Duration of paternity leave

Severance pay in Luxembourg

When an employer dismisses a worker for reasons other than serious misconduct, a notice period is mandatory. If the employee has been with the company for 5 years or more, they are entitled to an extended notice period and severance pay.

Severance pay calculation 2024
Length of service (years)Severance pay (months)Notice (months)Extended notice without severance pay (months)
Less than 5020
5 to 9145
10 to 14268
15 to 19369
20 to 246612
25 to 299615
More than 3012618
For small companies

However, companies with fewer than 20 employees have the option to substitute severance pay with an extension of the dismissed worker's notice period. The employer must explicitly state this choice in the dismissal letter.

The severance pay amount is contingent on the employee's tenure at the expiration of the notice period. For further details and legal references, consult the dedicated page on Guichet.lu, the Labor Code - Book I, Title II, Chapter IV, and the Labor Code - Book IV, Title I.

13th salary and non-compulsory benefits in Luxembourg

In addition to the mandatory benefits we've outlined, employers in Luxembourg also have the option to provide certain non-compulsory benefits, allowing for flexibility in enhancing the overall employee experience.

13th month salary in Luxembourg
This entails an additional month's salary paid as a bonus at the end of the year. It's crucial to note that the Labor Code does not mandate employers to offer this bonus. Furthermore, if some employees in the company receive this bonus, it doesn't automatically extend to all employees; employers have the freedom to determine eligibility. While often equivalent to a month's salary, the total may be prorated based on the number of months worked for those joining during the year.
Meal vouchers
Employers can provide special cards that employees can use at most restaurants in Luxembourg to receive complimentary meals.
Take-home cars
Certain companies permit employees to use a company vehicle for free during specific hours of the day.
Gym or health club
Companies may offer employees free access to a company gym or health club.
Profit-sharing bonuses
Some companies distribute this bonus to employees who have contributed to improving the company's results.
Additional perks
Various other benefits may include extra annual leave, a personal budget for learning and development, supplementary pension plans, additional health insurance, allowances for therapy or coaching, mentorship programs, volunteer days, and flexible working hours.
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How to obtain benefits and compensation?

Usually, to get benefits and compensation in Luxembourg, you just need to qualify for them. This means meeting certain requirements, like how long you've been with the company or specific aspects of your job or situation. For instance, to get maternity leave, you have to show you're eligible with the right paperwork. For many other benefits, simply talking to the right person in your company can help, whether that's your manager or someone from HR. They'll help you with any forms you need to fill out and guide you through the process to get your benefit.

Here is a summary of the requirements to access each of the aforementioned benefits:
Overtime payment
The sole requirement is to be covered by this benefit, as mentioned earlier certain individuals are excluded.
Annual paid leave
The fundamental requirement is work period of 3 uninterrupted months before being eligible to vacation benefits.
Weekend and holiday compensation
Automatic entitlement, but the amount vary based on the schedule and whether the holiday falls on a Sunday.
Sick leave
Declaring work incapacity through a medical certificate is necessary to qualify for sick leave benefits.
Maternity leave
You must notify the employer, submit a medical certificate to the CNS, and indicate the expected delivery date during the last 12 weeks of pregnancy.
Paternity leave
It is necessary to submit a medical certificate for childbirth or adoption papers at least 2 months before the anticipated leave dates.
Severance pay
To qualify, individuals must have a minimum stage of 5 years of tenure at the expiration of the notice period for dismissal.
13th salary
It is up to your employer to decide if they want to give it. It might depend on how you've worked, your position, or the company's financial situation.

What to do in case your employer is escaping paying benefits?

If you believe that your labor rights are being violated in Luxembourg, you should promptly reach out to the supporting authority.

The Inspectorate of Labor and Mines in Luxembourg (ITM) play a crucial role in safeguarding employees' rights and ensuring compliance with labor laws. By reporting problems to this regulatory body, you will obtain guidance, resolution, and enforcement of your rights.

3 rue des Primeurs, Strassen
(+352) 24 77 61 00
MON
8:30-12:00 and 13:30-16:30
TUE — FRI
8:30-12:00 and 13:30-16:30

Located 500m from the CHL (Centre Hospitalier de Luxembourg)

Work
Luxembourg
Rights
Read more about the labor law in Luxembourg
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faq

Frequently Asked Questions (FAQ)

What are the conditions for qualifying for severance pay in Luxembourg?

Do fathers have paternity leave in Luxembourg?

How is sick leave handled, and what documentation is needed?

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